Research shows that organisations with an IT focus are more than 25 percent more profitable than competitors. Because of this, IT department members should be more involved in strategic organisational decisions, but the department is, however, too often seen as nothing more than an expense centre. For those that realise that this, they are likely to perform better. Even so, how can others bridge the gap between ambition and reality?
What might surprise many is the financial impact that many IT departments face. For example, IT managers are expected to keep their organisation’s technology running smoothly, but they’re also expected not to spend too much money in the process. Even so, these same folks are not often seen as serious conversation partners when discussions of strategic plans arise. The truth is that IT managers are usually one of the last to be involved in such projects, even when IT plays a key role in the implementation of the project. This is a shame because it leaves the knowledge and talent of the IT department untapped.
This is, of course, frustrating for an IT manager. You’re expected to help the organisation move forward, but with very limited means; it’s like the organisation’s leaders are asking you to fix up an old car, even though there are cars that get you to your destination a lot safer, faster and more efficiently. Purchasing a Tesla is a large investment, but continuously fixing up an old vehicle isn’t cheap either in the long run.
There is another way, however. In more and more organisations, IT plays a large role in achieving the company’s goals. Take Amazon, for example. From the very start it had a clear digital strategy and is always experimenting with digital innovations to improve customer experience. IT is an integral part of its business. Also, more traditional organisations are making digital transformations, like telecommunications carrier Sprint and Walmart.
These digital transformations clearly don’t hurt organisations. In the book, Leading Digital, its authors claim that what they term the “digital masters” are, on average, 26 percent more profitable than other organisations in their field. There are multiple studies that show similar results when it comes to digital transformation. Research shows that organisations where management has some IT affinity, they are 20 percent more profitable than their competitors. The underlying trend: The more IT expertise management has, the more IT is used and the more profitable the organisation is.
Digital leadership provides great perspectives and should be the ambition of every IT organisation. However, for many organisations it’s still a bridge too far. You should focus on a more attainable goal – a strategic partnership with the business. In other words, make sure there is a good business IT alignment (BITA). Currently, BITA is the easiest path towards improvement. In most organisations, IT and business processes are relatively mature and technology is most likely in order. The next logical step is to align these processes and technology to really help the organisation move forward.
How do you help IT and the business partner up? How do you make sure that business leadership understands that you need to invest in a new car to move your organisation towards the future faster? And how do you make sure you are involved in the decision of which proverbial car is picked? There’s no one answer to these questions, but it can be done.